Taxes can feel a bit complicated if you're a self-employed gig worker, but it doesn't have to be! Here are our tips for crushing it during tax season:
1. First things first, figure out if your gig is what the Canada Revenue Agency (CRA) considers a "business."
2. Determine if the money you've made off some of your hobbies fits the bill when it comes to tax season.
If you sometimes make money off your hobby (like if your aunt gives you $50 as thanks for taking family portraits), this isn't considered self-employment income! Not sure where you land? Click here for extra help.
3. Mark it down on your calendar that you have extra time to file!
4. Record, record, record.
It's important to stay organized and record all that sweet money you make (...and spend).
Store your docs in a folder by date. Keep expense receipts and copies of invoices you’ve sent clients.
5. Save on taxes by reporting work-related expenses.
6. Keep your records for at least six years.
It may seem like a long time but the CRA and Revenu Québec can request to see them at any time in this period if your return is selected for review.
7. You *need* to report your income, even if it's cash!
8. Yup, you should report even if your total income isn't higher than the basic personal amount.
You don't owe federal taxes on the first several thousand dollars (it changes every year) but there are advantages to reporting it. It helps determine your eligibility for credits and benefits, and also helps establish more room to contribute to your RRSP or TFSA.
9. Keep in mind when you have to start charging GST/HST.
10. BUT all ride-share drivers must register for a GST/HST number right away.
This is for those who drive passengers. If your driving gig is for delivering food and not people, then the general $30,000 rule applies.
11. Having a full-time job doesn't impact how you report your income from side gigs.
12. If your net self-employment income is more than $3,500, you need to contribute to the Canada Pension Plan.
A Tax Expert can help you calculate how much you have to contribute!
13. As a gig worker, you can opt in for benefits.
14. Know how to avoid being audited.
Sometimes being audited is just luck of the draw but there are some things you can do as a self-employed worker to be ready. Keep excellent records and don't have an unreasonable number of family members on payroll!